Gold and Bitcoin Surge: Signals Time for a New Gold Standard?
In a month marked by remarkable surges in both Bitcoin and gold prices, speculation is growing about the sustainability of high interest rates in heavily indebted Western economies. These assets, usually favored by distinctly different investor groups, have seen simultaneous rallies, driven by soaring inflation and market volatility. Kathleen Brooks, Research Director at XTB, points out the significance of these parallel trends: "When gold and Bitcoin rise together, it prompts a deeper analysis of investor behavior. Both are capitalizing on the current market sentiment, as evidenced by record highs in major U.S., Japanese, and European stock indices." This alignment raises questions about the broader economic implications, including the feasibility of returning to a gold standard in a world moving away from dollar dominance.
In Response to a Steady Fed, Southeast Asia Adjusts Rates to Safeguard Currencies
As 2024 unfolds, the anticipation that the U.S. Federal Reserve might reduce interest rates has waned. Initially, the consensus was that a rate cut was imminent; however, four months into the year, the Fed's updated stance suggests no rush to lower rates, supported by a stronger-than-expected U.S. economy and persistent inflation. This cautious approach by the Fed is not just a concern for analysts and investors. Central bankers globally, particularly in Southeast Asia, are scrutinizing the Fed's moves closely. Their decisions on whether to adjust interest rates hinge significantly on the Fed's actions to avoid adverse impacts on their own currencies.
U.S. GDP Growth Stumbles to 1.6% in Q1, Missing Economic Forecasts
The U.S. economy started the year on a weaker note than anticipated, with the GDP growth rate decelerating to 1.6% in the first quarter, as reported by the Commerce Department. This figure significantly undershot the 2.4% growth economists had projected based on surveys by Dow Jones. The Gross Domestic Product (GDP), which gauges the total output of goods and services, showed a marked slowdown from the 3.4% increase in the final quarter of 2023 and the 4.9% rise in the quarter before that. While consumer spending did grow by 2.5%, it was less robust compared to the 3.3% increase in the previous quarter and also fell short of the 3% expected by Wall Street analysts.
Dollar's Decline Fuels Gold's Advance; All Eyes on U.S. Economic Data
Gold prices experienced a notable increase on Thursday, primarily driven by a declining U.S. dollar. Investors are now closely monitoring upcoming U.S. economic data, which could provide significant insights into the Federal Reserve's future interest rate decisions. As of midday in London, spot gold climbed 0.6% to reach $2,328.61 per ounce. Meanwhile, U.S. gold futures saw a modest rise of 0.1%, settling at $2,341.00 per ounce.
Insider Alert: Mike’s Made Two Changes to His Portfolio
Mike Maloney has recently made two investments - one of them using a very novel method.